The governments of Gibraltar and the UK signed a Double Tax Agreement (DTA) on 15 October to ensure that people with income or interests in both jurisdictions do not pay tax twice on the same income. It will position Gibraltar’s offering on a secure footing as Gibraltar exits the European Union alongside the UK.
The agreement records the UK and Gibraltar’s desire “to further develop their economic relationship and to enhance their cooperation in tax matters”.
The document states that the DTA will eliminate double taxation “without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance”.
The DTA applies to taxes on income and on capital and will enter into force once the UK and Gibraltar have completed their respective legislative procedures and exchanged diplomatic notes.
Gibraltar Chief Minister Fabian Picardo said: “I am very pleased that the outcome of close working with UK ministers and officials has come to fruition in time for our exit from the EU with the UK. This is an important part of the architecture of our planning for ‘no deal’ but equally important going forward in any scenario.”
Gibraltar has been working towards such an outcome for several years with the substantive text agreed on the 1 August and the final text agreed in the second week of September 2019.
The DTA is the latest in a series of developments pursued by the Gibraltar government in the areas of international tax treaties and information exchange agreements, all of which maintain Gibraltar’s commitment to international standards of tax transparency and co-operation.